Critics Set To Fight Plan To Cut Impact-Aid Funding

With all the talk in Washington about increasing education funding,
John F. Deegan feels left out.

Mr. Deegan is the superintendent-elect of the Bellevue, Neb., school
district, which stands to lose nearly $6 million--more than 10 percent
of its annual operating budget--if President Clinton's proposed budget
passes.

In contrast to his plans to boost expenditures on other education
programs, the president wants to decrease funding for impact aid--cash
payments that reimburse districts for loss of taxes and other revenues
due to federal activities, most often the presence of military bases
and American Indian reservations. The Bellevue district, for instance,
receives about 45 percent of its 9,000 students from families stationed
at nearby Offutt Air Force Base.

Executive-branch officials assert that the changes are necessary to
reform a pork-laden program. And the White House Office of Management
and Budget argues that any funds cut from impact aid would be spent on
other education programs that would benefit all students. "It's not as
if we're saving money for no reason," said Lawrence J. Haas, a
spokesman for the OMB.

Many in Congress, on the other hand, appear skeptical and poised to
challenge the president's plan.

At a Senate Appropriations subcommittee hearing last week, one
senator berated Department of Education officials for trying to reduce
funding for a program that he said has helped his district immensely
and gotten money to the classrooms. "Those are real dollars, on the
ground, in the classroom," said Sen. Larry E. Craig, R-Idaho.

Regardless, in Bellevue and 1,800 other school districts that
receive impact aid, the proposal is a source of concern and
frustration.

"The president has missed the point," Mr. Deegan said.

Long-Running Feud

Paying for the program has created an annual push and tug between
the White House and Congress almost since impact aid's inception in
1950. Past administrations have wanted to downsize the program and
reallocate the money for other education projects, but met resistance
from members of Congress who wanted to protect their constituencies.
The program has been significantly cut only once, during the Reagan
administration.

Now, another round of battle has begun. In the fiscal 1998 budget
plan he sent to Congress earlier this year, Mr. Clinton proposed
decreasing overall funding of the program by nearly 10 percent, from
$730 million to $658 million, and eliminating several eligibility
categories. ("Clinton Asks $10
Billion Boost for Education," Feb. 12, 1997.)

This year, Congress may have a little more ammunition for impact
aid's defense: Lawmakers from both parties have formed coalitions to
stave off the president's proposal. So far, 28 senators and 105 House
members who represent districts that receive impact aid have
joined.

Lobbying efforts of the House coalition paid off when Republicans
took control of Congress in 1995, the same year the coalition was
created. Coalition members were able to persuade several key House GOP
leaders to switch from calling for impact aid's elimination to
defending it as a crucial obligation, said John B. Forkenbrock, the
executive director of the National Association of Federally Impacted
Schools.

How Cuts Would Fall Out

But NAFIS sees it as a greater loss. The group estimates that more
than 500 of the 1,800 districts that now receive impact aid would no
longer qualify under the Clinton plan.

About 300 of those districts receive aid for property taxes and
other revenue lost from civilian properties, such as federal
rent-subsidized housing projects. Another 200 districts receive
compensation for taxes lost on land that the federal government has
taken off the tax rolls, such as national parks or toxic-waste sites.
The president's budget would eliminate payments under both
categories.

The omb contends that the program has veered from its original
purpose, and that payments for unsettled land where children do not
live is merely pork for congressional districts.

Mr. Clinton also wants to eliminate aid for students whose families
work but do not live on federal property. Under the current formula, a
district receives one-tenth the amount for those students that it does
for students whose families live on federal property.

"We want to target this program more to districts that really have a
major funding burden when it comes to the presence of children who are
in the schools but their parents aren't paying taxes toward their
education," Mr. Haas said.

But districts still lose much-needed tax dollars from military
families not living on a base, Mr. Forkenbrock said. Such a family
could claim residency in another state, and also would likely shop at
tax-exempt stores on the military base, he said.

The president's budget would also change the funding formula for
impact aid. Districts would receive the money based on the state's
average per-pupil expenditures, giving an advantage to states with
higher costs.

But Mr. Forkenbrock said that would reduce aid to some of the
neediest districts, while increasing aid to some of the wealthiest,
such as Fairfax County, Va.

Bellevue's Fight

In Nebraska, Mr. Deegan has enlisted the help of his congressman,
Rep. Jon Christensen, a Republican and a member of the House impact-aid
caucus. "Rest assured that we'll continue to fight," Mr. Christensen
said recently.

About 20 percent of the Bellevue district's $52 million operating
budget comes from impact aid.

The district would take a double hit under Mr. Clinton's plan: It
would lose about $400,000 in aid it receives for students who do not
live on the base, and it would lose about $5.5 million in funds for
heavily impacted districts, because those students could not be tallied
and the district could therefore not meet the required quota.

The omb argues that students living outside military bases do not
place a substantial burden on districts. Such students usually live in
private housing and directly support local communities, OMB Director
Franklin D. Raines wrote in a letter to Mr. Christensen this month.

In the letter, Mr. Raines said the $658 million proposed in the
Clinton plan would be enough funding for impact aid. With the proposed
cuts in the number of eligible students, the average per-pupil payment
for students who live on federal properties would increase from $440 to
$1,770. The program would reduce from 1.4 million to 330,000 students,
leaving only those from American Indian reservations or whose families
live and work on military bases.

Raising local taxes would not be an option for Bellevue to
compensate for lost federal aid because the district has a
tax-limitation law, Mr. Deegan said. He fears he would be forced to cut
school staffing and programs, resulting in overcrowded classes.

At least 100 teachers would have to be laid off just to recoup the
lost money for students who do not live on federal property, he
added.

Mr. Deegan said he's tired of having to repeatedly plead his case
and worry whether the federal dollars will be there another year.

"This is a terrible game that has to be played with military
children," he said.